M/S. MIDLAND ENGINEERING AND CONTRACTING COMPANY v. KERALA WATER AUTHORITY

KERALA WATER AUTHORITY REP. BY ITS MANAGING DIRECTOR, JALA BHAVAN, VELLAYAMBALAM, THIRUVANTHAPURAM, PIN - 695055 THE SUPERINTENDING ENGINEER OFFICE OF THE SUPERINTENDING ENGINEER, KERALA WATER AUTHORITY, PH CIRCLE-KOZHIKODE MALAPARAMBA.P.O., KOZHIKODE, PIN - 673009 THE EXECUTIVE ENGINEER OFFICE OF THE EXECUTIVE ENGINEER KERALA WATER AUTHORITY, PROJECT DIVISION-KOZHIKODE MALAPARAMBA.P.O., KOZHIKODE, PIN - 673009 KERALA CONSTRUCTION WORKERS WELFARE FUND BOARD REP. BY ITS CHAIRMAN, NIRMAN BHAVAN, METTUKKADA, THYCAUD.P.O., THIRUVANANTHAPURAM, PIN – 695014 SRI.P.M.JOHNY – SC - KWA SRI.C.R.SYAMKUMAR – SC KCWWF BOARD THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON

05.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 8457 OF 2024 2 JUDGMENT The petitioner is stated to be a company engaged by the Kerala Water Authority (KWA).

2. The specific case of the petitioner is that they have been contracted with the ‘KWA’ only to supply materials for pipeline works being carried on by them; and that they have no connection with such construction work, or its allied performance. They argue that, obviously, therefore, no “Cess” under the Kerala Construction Workers Welfare Fund Act (“KCWWF Act”), could have been imposed against them, since the contracts entered into by them have no relation to the construction work at all, or to the construction workers.

3. The petitioner says that, however, in spite of this, 1% of their bill amount is sought to be now deducted towards “Cess” under the “KCWWF Act”; and consequently, that they have been constrained to approach this Court, through this writ petition. They assert that their contentions are supported by the judgments of this Court in Poulose and others v. State of Kerala and others [1993 (3) ILR Kerala 675] and Kerala Construction WWF Board v. State of Kerala [1995 (2) KLT 724].

4. Sri.P.M.Johny – learned Standing Counsel for the ‘KWA’, WP(C) NO. 8457 OF 2024 3 however, in response to the afore submissions of Sri.P.Shanes Methar – learned counsel for the petitioner, argued that, since the petitioner is a contractor under the ‘KWA’, their obligation to pay “Cess” under the “KCWWF Act” is unmistakable and unavoidable. He argued that, as long as the petitioner is involved in construction works, they certainly have to pay “Cess” and they cannot refuse it in any manner whatsoever.

5. It is luculent from the afore rival positions that there is factual disputation as to the nature of the contracts entered into by the petitioner with the ‘KWA’. While they maintain that they are to only supply materials, without having any participation in the actual construction work; the ‘KWA’ appears to take the stand that, even the supply of materials is part of the construction work.

6. However, it must be borne in mind that “KCWWF” Scheme has a particular ambit to it and its purlieus are also well defined. It is only if all the criteria thereunder are satisfied, will the obligation of a contractor to pay “Cess” thereunder be attracted.

7. In the case at hand, as I have already said above, it is the specific contention of the petitioner that they only supply materials and have no part in the construction work. If this be so, certainly, it is a matter which the Superintendent or such other competent Authority of ‘KWA’ must consider, before imposing “Cess” upon them, through an WP(C) NO. 8457 OF 2024 4 automatic deduction from their bills.

8. When there is a clear factual dispute as afore, it would not be proper for one of the contracting parties unilaterally to impose a detriment on the other, citing that they are liable to pay “Cess”, without even making an assessment of the same and without affording them an opportunity of being heard. In the afore circumstances, I allow this writ petition and set aside impugned proceedings and direct the competent Authority of the ‘KWA’ to hear the petitioner and assess their claim, that they are not liable to pay “Cess” under the “KCWWF Act” because, they only supply materials and not concerned with the construction work. The afore shall be done, after affording the petitioner an opportunity of being heard and after assessing their contentions and the germane documentary materials; thus culminating in an appropriate order and necessary action thereon, as expeditiously as is possible. This shall be done also adverting specifically to the declarations in the afore cited precedents. Needless to say, until such time as the afore is done and the resultant orders communicated to the petitioner, action to recover any amount from their Bill amounts towards “Cess” under the “KCWWF Act”, WP(C) NO. 8457 OF 2024 5 will stand deferred; and will be taken forward only after the said orders are communicated to them and in terms of the decisions will be arrived at. As a corollary, if, through the afore exercise, it is to be found that “Cess” under the “KCWWF Act” cannot be imposed against the petitioner, then the amounts already collected from them under such head will be returned without any avoidable delay. Sd/- DEVAN RAMACHANDRAN JUDGE MC/5.3 WP(C) NO. 8457 OF 2024 6 APPENDIX OF WP(C) 8457/2024 PETITIONER EXHIBITS Exhibit P1 Exhibit P2 Exhibit P3 Exhibit P4 Exhibit P5 Exhibit P6 Exhibit P7 Exhibit P8 Exhibit P9 Exhibit P10 Exhibit P11 Exhibit P12 Exhibit P13 Exhibit P14 Exhibit P15 Exhibit P16 Exhibit P17 Exhibit P18 Exhibit P19 A TRUE COPY OF THE E- TENDER NO.SE/PHC/ KKD/01/2021-22 DATED NIL PUBLISHED BY THE SECOND RESPONDENT A TRUE COPY OF THE WORK ORDER NO. SE/PHC/KKD/D1/854/2021 DATED: 01.12.2021 (TOGETHER WITH THE ACCEPTED SCHEDULE) ISSUED BY THE SECOND RESPONDENT A TRUE COPY OF THE RELEVANT PAGES OF AGREEMENT NO.SE/PHC/KKD/16/2021-22 DATED 1 4 /12 / 2021 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC 1ST AND PART BILL DATED NIL A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC 2ND AND PART BILL DATED NIL A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC 3RD AND PART BILL DATED 26.3.2022 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC 4 TH AND PART BILL DATED 27.04.2022 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC VTH AND PART BILL DATED 1.06.2022 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC VITH AND PART BILL DATED 30.06.2022 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC VIITH AND PART BILL DATED 21.10.2022 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC VIIITH AND PART BILL DATED 11.01.2023 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC IXTH AND PART BILL DATED 13.02.2023 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC XTH AND PART BILL DATED 27.02.2023 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC XITH AND PART BILL DATED 10.03.2023 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC XIITH AND PART BILL DATED 21.03.2023 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC XIIITH AND PART BILL DATED 19.06.2023 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC XIVTH AND PART BILL DATED 4.08.2023 A TRUE COPY OF THE CB3 VOUCHER PERTAINING TO CC XVTH AND PART BILL DATED 9/2023 A TRUE COPY OF THE REPRESENTATION DATED 27.2.2024 SUBMITTED BY THE PETITIONER BEFORE THE SECOND RESPONDENT WP(C) NO. 8457 OF 2024 7 Exhibit P20 A TRUE COPY OF THE JUDGMENT DATED 4.12.2023 IN W.P (C) NO.39649 OF 2023 AND CONNECTED CASES OF THIS HON'BLE COURT